Everything points to a recession
Retail sales plummet; gas and electricity prices soar, further eating into already squeezed disposable incomes; Citigroup and Merrill Lynch, two of the great symbols of American capitalism, forced to hand round the begging bowl among Asian and Middle Eastern sovereign wealth funds after massive write-downs on US sub-prime mortgage lending.
Northern Rock teeters on the brink of nationalisation; confidence in the UK housing market drops to its lowest level since the recession of the early 1990s; share prices bludgeoned; sterling in free-fall; corporate profit warnings at a six-year high; retail investors dash to withdraw their money from collapsing commercial property funds; credit insurers downgraded, threatening multiple defaults in debt markets.
If that were not enough
Spectre of negative equity haunts Britain
It was a nightmare for almost a million homeowners in the early 1990s, leaving them with properties worth less than they owed. In despair, many of them simply gave up and handed the front door keys back to the building society.
Even two decades on, the words "negative equity" send a shiver down the spines of people who were unable to move from their homes in the doldrums that followed the late 1980s housing crash. But it is not merely a thing of the past. The runaway boom which turned the housing market into a one-way bet during the past decade has come to an abrupt and shuddering halt. Now, it seems, it has gone into reverse – and many experts fear the worst.
And its leading article
The boom is over. The only question now is how hard the landing will be
Any hopes that economic policymakers and central bankers might have harboured of the new year bringing good news for the world economy have been well and truly dashed. The situation is looking more ominous than at any time since the present crisis of confidence in Western economic markets began
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